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Journal of Islamic Marketing

Halal risk mitigation in the Australian–Indonesian red meat supply chain Ujang Maman, Akhmad Mahbubi, Ferry Jie,

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Halal risk mitigation in the Australian –Indonesian red meat

supply chain

Ujang Maman and Akhmad Mahbubi

Department of Agribusiness, Faculty of Science and Technology, State Islamic University Jakarta, Jakarta, Indonesia, and

Ferry Jie

School of Business and Law, Edith Cowan University, Western Australia

Abstract

Purpose–This study aims to identify halal risk events, halal risk agents, measure halal risk level and formulate the halal risk control model (mitigation) in all stages in the beef supply chain from Australia to Indonesia.

Design/methodology/approach – This research combines qualitative and quantitative method. It elaborates nine variables as the Halal Control Point: halal animal, animal welfare, stunning, knife, slaughter person, slaughter method, invocation, packaging, labeling and halal meat. This study uses house of risk, a model for proactive supply chain risk.

Findings–The main mitigation strategies to guarantee the halal beef status in the abattoir is the obligation of vendor or the factory to issue a written manual of stunning tool. The priority of halal risk mitigation strategies for the retailing to avoid the meat contamination is the need of a halal policy for transporter’s companies and supermarkets.

Research limitations/implications–Every actor must be strongly committed to the application of halal risk mitigation strategies and every chain must be implemented in the halal assurance system.

Originality/value–This model will be a good reference for halal meat auditing and reference for halal meat import procurement policy.

Keywords Mitigation, Halal risk agent, Halal risk event, Halal risk level Paper type Research paper

Introduction

World population in 2015 reached 7 billion people. More than a quarter or 2.04 billion people are Muslim population in the various continents. The largest Muslim populations are in Asia, namely, 1.39 billion people (69 per cent of the Muslim population of the world).

Furthermore, in a row, there are 582 million of Africa, 56 million of Europeans, 10.1 million of America, and 1.77 million of Oceania (Muslim Population, 2015). In country, Indonesia is the largest Muslim country in the world, as many as 219 million people or 10 per cent of world Muslim population are Indonesian Muslims. The trend of Muslim population is increasing including in the West. The UK Muslim has been growing 10 times faster than the

The research is funded by the grant from The Institute for Research and Community Outreach, Jakarta Syarif Hidayatullah State Islamic University of Jakarta (UIN Jakarta) in the Program of World Class University. The Rector of UIN Jakarta has supported the program as one of the excellent programs of the university.

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Received 21 December 2015 Revised 12 May 2016 16 August 2016 Accepted 23 January 2017

Journal of Islamic Marketing Vol. 9 No. 1, 2018 pp. 60-79

DOI10.1108/JIMA-12-2015-0095

The current issue and full text archive of this journal is available on Emerald Insight at:

www.emeraldinsight.com/1759-0833.htm

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non-Muslim population. The same phenomenon also occurred in French city of Marseilles;

approximately one-third of its inhabitants are Muslim, and it’s predicted that it will soon become the Muslim Majority city in Europe (Wilson, 2014).

Derived by religion which affects Muslim consumer behavior according to religious afﬁliation, commitment, orientation, and also by shift of halal awareness and perception which lied in someone as being Muslim (Wilson and Liu, 2011; Journal of Islamic Marketing, 2012), the amount of the Muslim population, especially in Indonesia, requires the availability of halal products. The need of halal is not only for Indonesia and Muslim-majority countries but also for non-Muslim countries, such as China, India, France, UK, USA and Australia which have Muslim inhabitants. The fast food restaurants such as McDonald’s, KFC, Domino’s and Subway in Europe have provided halal food in their restaurant chain (Wilson and Liu, 2010).

The 2013 Thomson Reuter and Dinar Standard “State of Islamic Economy” report estimated that the global halal industry is valued currently at US$2.3 trillion (Wilson, 2014).

For more detail,Thomson Reuters (2014)described that global Muslim spending on food and beverages has increased by 10.8 per cent to reach $1,292 billion in 2013. This took inﬂating halal food market potential to be 17.7 per cent of the global expenditure in 2013 compared to 16.6 per cent at the year before. This expenditure is expected to grow to $2,537 billion market by 2019 and will account for 21.2 per cent of the global expenditure. A 2013 special report focusing on halal food logistics proved that the costs for the global halal food market was $151 billion. Malaysia, United Arab Emirates and Australia introduced halal food indicator that focuses on the health of the halal food ecosystem. Meanwhile, top countries with the biggest Muslim consumer of halal food are Indonesia ($190 billion), Turkey ($168 billion), Pakistan ($108 billion) and Iran ($97 billion).

One of the core sectors of Indonesian food industry affected by halal processes is meat and live animal sector. The Indonesian halal meat consumption comes from the various types of livestock permitted by Islam, namely, cattle, buffaloes, goats, sheep, chickens and ducks. In 2014, according to the Ministry of Agriculture (2015), the level of meat consumption of Indonesian society is by 8 kg/capita/year, with in details of the beef consumption is 2.3 kg/capita/year, chicken meat consumption is 4.8 kg/capita/year and other meat consumption is 0.9 kg/capita/year. In 2013, the total consumption of Indonesian halal meat was estimated to reach 2.2 million tons with a market value of US

$10 billion.

The supply of halal meat in Indonesia generally comes from local farmers both poultry and ruminants. The production of halal meat from poultry reached 1.67 million tons and 0.5 million tons of ruminants. The supply of beef in Indonesia is still deﬁcit of 184 thousand tons, or 40 per cent of national beef demand. This deﬁciency is met through imported beef from Australia who inhabited Muslim minority. Beef supply requirement, both from domestic and imported from Australia, has been related to meat production process in Islamic law, especially in animal’s slaughtering stage. This requirement extends to ingredients that are part of various processed food products as well. There is a technology supporting the process of halal meat, while food supply chain is also increasingly looking for halal integrity in its transportation step. Relevant with this, all meat processes from farmers to end consumers need a halal assurance system process in the halal supply chain risk management approach.

Literature review

Conceptually, a supply chain is a series of physical and decision-making activities connected by material and informationﬂows and associated ﬂows of money and property rights that

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cross-organizational boundaries; and supply chain management is a business process in which it can be seen as a structured, measured set of activities designed to produce a speciﬁed output for a particular customer or market (Vorst et al., 2007). Generally, there are four echelons in supply chain management (Narahari and Biswas, 2007). First, procurement includes supplier selection, direct delivery from suppliers, vendor-managed inventories, optimal procurement inventories and optimal procurement policy. Second, processing includes processing location, capacity planning, capacity allocation, inventory decisions, optimal processing strategy, input control, production scheduling and constrained supply.

Third, distribution includes configuration of distribution facilities, location, retailer or costumer allocation, facility configuration and optimal distribution strategy. Finally, logistics includes logistics mode selection, selection of port, direct delivery and optimal transportation strategy. According toSporleder and Boland (2011), one of seven specific economic characteristics of agri-food supply chains is a risk emanating from the biological nature of agri-food supply chains.

Halal supply chain is a concept of productﬂow ranging from farmers to consumers which pay attention on the halal and toyyib condition along the products supply chain (Omar et al., 2012). In contrast to conventional supply chain, every level of halal supply chain process should compliance with the rules of Islamic law (Bahrudin et al., 2011). The typical characteristic of the halal supply chain process is not lawful to tolerate contamination and contact with haram elements (Tieman, 2011). Referring toWilson and Liu (2011), what is halal at its apex is that which is pure, praiseworthy and of beneﬁt. For Muslim, it should be given and present in all consumed commodity. In the case of doubt of the probable contamination, according toWilson and Liu (2010), Muslim tends to take the position of avoidance because of the risk of spiritual or physical punishment within hereafter.

Halal is going through an evolution covering four phases: Muslim company, halal product, halal supply chain and halal value chain. In the Muslim company, the halal assurance system is purely based on trust. The sentiment of trust is being divine privilege and, therefore, worthy of serious consideration when they are engaged in something which is deemed halal (Wilson and Liu, 2010). In the halal product, the halal assurance system is based on a product certification by independent halal certification body. In the halal supply chain, halal assurance is extended upstream (addressing transportation and storage requirements of purchased ingredients) and downstream (addressing transportation and storage and value-adding requirements of the supply chain). In the halal value chain, the company is applying Islamic values to their entire business value chain. Among others, this covers the adoption of Islamic financing and takaful (Islamic assurance), use of Islamic branding and marketing concepts in the position of the products and creating value of the community and the earth, for example, minimization of waste (Tieman, 2015). According to Rahman et al. (2013), the important drivers of implementing green supply chain practice in the halal food companies are performance and quality improvement and waste and cost reduction.

Halal food supply chain involved the process of managing halal food products from different points of suppliers to different points of buyers/consumers, which involved various different parties, who are located at different places, which may be, at the same time, involved with managing non-halal food products, with the purpose of satisfying the needs and requirements of both (halal and non-halal) customers (Zulfakar et al., 2012). Today, halal supply chain is complex for various reasons. First, there are different halal market requirements, which are based on Islamic school of thought, local fatwa (religious rulings) and local custom. There are different interpretations on slaughtering requirements (regarding stunning and machine slaughter, which cannot be found anymore in theﬁnal

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ingredient and need for ritual cleansing. Second, as supply chain partners are based on different halal environments dealing with a single supply chain (Muslim and non-Muslim country). Third, there is a poor understanding of halal and halal logistics requirement in particular non-Muslim countries, requiring a lot of educational efforts in their supply chains (Tieman, 2015).

Refer toTieman et al. (2012), the product characteristics (bulk versus unitized, ambient versus cool chain) and market requirements (Muslim or non-Muslim country) determine the supply chain vulnerability to halal contamination, for which halal control activities and assurance activities are put in place to reduce supply chain vulnerability. Tieman and Ghzali (2013)developed a halal procurement maturity model which consists of the following three stages: viewing halal compliance as opportunity, making halal supply chains and halal value chains. Slaughtering has been mentioned as an essential requirement of halal meat from land animals (Qureshi et al., 2012). The study ofOmar and Jaafar (2011)found that halal animal feed, proper slaughtering and proper segregation are the three pertinent areas that need focus on the halal food supply chain.

The uncertainty and the impact of an event in the supply chain is a risk (Sinha et al., 2004). The supply chain risk consists of 17 types of risk, namely, the risk of standardization complaints including halal standards, product quality, production cost, competition, demand, supply fulfillment, storage, shipping timeliness, accuracy of budget delivery, delivery fulfillment, order fulfillment, partner error, distance, suppliers, supplier management, engineering and innovation, transport, disaster and foreign products (Schoenher et al., 2008). Analysis of supply chain risk is a part of supply chain management that must be done to avoid or to reduce business failure under the conditions of uncertainty (Mariminand Maghfiroh, 2011). According to Norrman and Jansson (2004), the focus of supply chain risk management is to understand, and try to avoid, the devastating effects that disasters or even minor business disruptions can have in a supply chain. The aim of supply chain risk management is to reduce the probability of risk events occurring and to increase resilience, that is, the capability to recover from a disruption.Sheffi and Rice (2005) suggest that the supply chain resilience can be improved by either creating redundancy or improving flexibility. Ritchie and Brindley (2007) suggested that classic supply chain risk management such as maintaining buffer stocks and slack lead times are becoming less viable nowadays. However, as suggested by Pujawan and Geraldin (2009), supply chain risk analysis can use a house of risk (HOR) which is an innovative model for proactive supply chain risk management.

The framework ofhalal critical point in the Australian–Indonesian halal red meat supply chain

The halal critical analysis framework of red meat, especially beef, should be acquired by supply chain approach. Referring toJie (2008), there are three stages of beef supply chain from breeding to the end consumer. The First stage in Jie’s terminology is the “turning grass into meat”. This stage consists of many activities such as cattle breeding, feedlot and livestock selling. The second stage, which is mainly beef processing, includes holding yard, slaughtering, meat processing and packaging as theﬁnal stage of meat processing. The meat processing comprises hide removal, removing internal organs, trimming, weighing, chilling and boning. The boning process is a meat cutting into small pieces, while the trimming is the process to remove the excess fat or bruising. The third stage is as theﬁnal process to deliver the meat to end consumer. The process is called the wholesaling or

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retailing. In the Australian condition, the wholesaling is divided into two parts, the domestic and international market.

In the halal perspective, each stage of the beef supply chain should comply with the halal requirements.Riaz and Chaudry (2004)formulated the halal control point (HCP) as if a stone corner to put step to see the halal fulfillment from early breeding, feedlot, slaughtering process as well as the retailing. For more detail, in pre-slaughtering process, at least there are two HCPs. In the slaughtering process, there arefive HCPs, and in the post-slaughtering, there are two HCPs. The slaughtering process gets more halal risk. Thefirst of two HCPs are halal animal and animal welfare in breeding and feedlot. The five HCPs are stunning, slaughter person, slaughter methods, knife and invocation in abattoir process. While, the last two HCPs are in post-slaying (HCP-8) which includes halal carcass, deboning and boning, hide and other parts and meat cuts and, finally, packaging and labeling as the HCP-9. The basic halal principle in the post-slaughtering is to prevent the meat from non- halal meat orfilth material, although it comes from the animal itself.

In theﬂow of cattle herds from Australia to Indonesia, as illustrated inFigure 1, the focus of halal analysis should be placed mainly in Indonesian beef supply chain. The major HCPs

Figure 1.

The halal control points in the Australian– Indonesian halal beef supply chain

A U S T R A L I A N

B R E E D I N G

P R O P E R T Y

Feedlot

Auctions Plus

Saleyards

Fattening Property

Processing (AUS Abattoir)

Broker

Exporter Wholesaler

Food Service Industry

Butcher Shops

Supermarkets And Traditional Market

Broker

I N D O N E S I A N

C O N S U M E R S Backgrounding

Property

Live Animal

Exporter ^Importer

Importer

Feedlot

Farmer Processing (RI Abattoir) Australian

Feedlot

Indonesian Retailer HCP 8 –Outlet Indonesian

Processor / Abbatoir

Indonesian Consumers Australian – Indonesian Halal Red Meat Supply Chain

HCP 2 – Stunning HCP 3 – knife HCP 4 – Slaughter Person HCP 5 – Slaughter Method HCP 6 – Invocation HCP 7 –Deboning,Packaging

& Labeling

HCP 1 – Animal Welfare HCP 9 – Beef Cooking

Source: Adopted form Jie (2008), Riaz and Chaudry (2004)

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are in slaughtering process in abattoir. The Assessment Institute for Food, Drug and Cosmetics– The Indonesian Council of Ulama (LPPOM-MUI) especially compiles The Halal Assurance System-23103 (HAS 23103) for abattoir which indicates that the major risk of halal meat mostly occur in abattoir process. Referring toJie (2008), the most Middle East Countries as well as the South East Asian counties prefer to import the live cattle than processed beef so the countries can manufacture the cattle in accordance to the religious belief. In Indonesia, according toMinistry of Agricultural Republic of Indonesia (2015), more than 65 per cent of beef import from Australia is in the form of live cattle.

Absolutely, the HCP of the halal animal and the animal welfare take the point to analysis in the ﬂow of red meat supply chain. It is suspected to the existence of cross-breeding practices between cattle and pig in which it emerges the consequence of unlawful status of cattle. But, Jie (2008) presented four common methods of breeding in Australian beef community, which are as follows:

(1) the straight breeding which is usually adopted in Queensland between one species of cattle;

(2) cross-breeding method in which two or more straight breeding are combined; for example, Brahman and Hereford are crossed and then selected within the crossbred population to form some breeds;

(3) heterocyst methods in which a mixture vigor or heterocyst is the difference between the performance of the progeny and the average performance of the parental breeds to achieve maximum productivity in a commercial herd; and (4) selection of superior parental animals which can accomplish the maximum number

of desirable genes.

Jie’s in-depth study indicates the rarity of cross-breeding between pig and cattle. The fact has answered the strong point of HCP-1.

About the animal welfare, based on direct observation on the cattle farm in Melbourne area, it is well practiced. Furthermore, theLPPOM-MUI (2012)does not require the cattle feed clean from theﬁlth to get halal status of meat. There is no restriction if grass of animal feed is touched or contaminated by the cow manure, for example. Actually, it is the legal and formal law of halal status of meat. But, the teaching of Islam– as all Muslims agrees – orders people to consume the thoyyib of food. The word of halal in the Qur’an has not been separated from thoyyib, which indicated the demand for mankind to consume the clean and healthy food. Based on the demand,Riaz and Chaudry (2004)place the animal welfare in pre- slaughtering stage as one of HCPs as the requirement to get thoyyib status of meat.

By realizing the facts, the paper focuses on the analysis of halal risk in theﬂow of beep supply chain in Indonesia from feedlot to meat retailing, supermarket as well as the traditional market. The paper also traces agent of halal risk, mapping the agent, andﬁnally come to planned and proposed mitigation strategy. The area of the study is the beef processing in Indonesia as part of the beef supply chain from Australia to Indonesia.

Research methodology

There are at least two variables presented in this paper, namely, halal risk and halal risk agent. The halal risk is an allegation of the existence of unlawful animal, or the lawful animal contaminated– or at least touched – by the non-halal animal, or the halal meat contaminated by theﬁlth material, although it come from the cow itself. While the risk agent is the fact or the condition that probably emerge the halal risk, such as the less awareness of

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halal requirement to separate completely the fulﬁlled meat of halal requirement with the part of meat which does not meet the halal criteria.

The halal risk is measured by the severity level of the risk. The severity in the halal risk is not the size of impact to the emergence and the spread of risk, but the difficulty to avoid. The more difficult to avoid, the halal risk has more probability to happen. Therefore, the keyword used to measure the risk is“difficulty” which is elaborated into three levels of Likert scale to be difficult, neutral and easy followed by the sequence of score 5, 4 and 3 (Pujawan and Geraldin, 2009). This is because the size or volume of the contaminant material, referring toLPPOM-MUI (2012), has not been considered in the case of halal. The halal meat, for example, directly becomes unlawful just because it is contaminated by a very small size– or even by the touching – of unlawful meat. The measure of halal risk agents are by the level of occurrence of the agent, in which the keyword used is the common, neutral and uncommon in the Likert scale followed by the score of 5, 3 and 2.

The instrument to measure the probable halal risks event and the halal risk agent are compiled by referring to HAS 23103 ofLPPOM-MUI (2012)as the recognized halal standard in Indonesia. In addition, the instrument is also designed by focus group discussion (FGD) with the halal auditors of LPPOM-MUI as well as by in-depth interviews with the halal expert who has the high experience of halal research. The data collection using the compiled instrument are also conducted by in-depth interview, direct observation, guided interview and also by FGD with various parties involved in beef supply chain process, such as beef feedlot practitioner, abattoir clerk and manager, transporter and also retailers.

Data analysis is processed by using the HOR. It is a model for proactive supply chain risk management, which was developed byPujawan and Geraldin (2009). The HOR is divided into two parts, the HOR-1 and the HOR-2. The HOR-1 in this analysis produces the sequences of aggregate risk potential. In this paper, while it focuses on halal risk, the HOR should also produce the AHRP, which easily lead to proposed and planned mitigation strategy. While the HOR-2 leads to yield the sequences of halal risk mitigation strategy. The HOR analysis is of course based on the severity level of halal risk event, the occurrence level of halal risk agent, and also the impact or correlation of the halal risk agent to the halal risk event.

Result and discussion

The paper presented the halal risk event, halal risk agent and the halal risk mitigation in the ﬂow of beef supply chain from to feedlot to beef processing and retailing.

Halal risk events and halal risk agents in the feedlot

The two Halal Control Points (HCPs) in the feedlot are animal welfare and halal animal. In the light of HAS 23103 of LPPOM-MUI, the research identiﬁed at least eight probability of halal risk in the feedlot process. The eight mentioned halal risks are difﬁcult to:

(1) get information about calf process production;

(2) gain protein supplement of animal feeding with the halal logo;

(3) gain supplement of animal drug with the halal logo;

(4) make a 5 km minimum distance between cattle farm and piggeries;

(5) form a habit that animal drinking water supply should be regularly scheduled;

(6) form a habit that animal feeding should be regularly scheduled;

(7) form a habit that animal health check should be regularly scheduled; and (8) form a halal and thoyyib awareness related to animal welfare.

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By the keyword of“difficulty” elaborated in Likert scale, the identified probability of halal risk is classified into three categories. The first is the irrelevant statement because the matter is not existed, such as the statement about“Make a 5 km minimum distance between cattle farm and piggeries.” The second of identified halal risk probability is “the most easy to handle” because it is part of farmer’s culture and habit. In this case, there is no halal risk, and of course, it does need to mitigate. The third is actually halal risk.

By the process, the rest of halal risk in the feedlot is presented inTable I. The risks are difﬁcult to:

get information about calf process production;

gain protein supplement of animal feeding with the halal logo; and

gain supplement of animal drug with the halal logo.

The three difﬁculties are faced by the Indonesian feedlot as well as the Australian feedlot;

and it needs to mitigate. The difﬁculties emerge the question of why it gets hard. To answer the question, the research explored the nine probable causes related to the halal risk agents.

But, based on the FGD with the feedlot practitioners, depth interview and direct observation, the research came into three halal risk agents presented inTable II.

Considering the data presented inTable II, what is the appropriate mitigation to solve the halal risk agent? The question led us to map and rank the halal risk agent.

Halal risk level in the feedlot

Relating to halal risk agents, the question is how many per cent of each HRA contributes to the emergence of HRE? Also, which HRA actually need to mitigate? The questions oblige us to map the halal risk agent in the form of AHRP, which elaborated from the Aggregate of Risk Potential. Referring toPujawan and Geraldin (2009), the ARP is a result of occurrence of HRA, the severity of HRE, and the impact of HRA to HRE. The formula is elaborated by entering the data into the HOR-1 to prove the halal risk level as presented inFigure 2.

Based on the process, the halal risk agent is the calf suppliers do not explain its production process (A1) contributes more than sixty presents to the emergence of halal risk events. Of course, this agent should get a priority to mitigate. The next priority of halal risk agent which requires to control is the rare of the animal feed protein supplement products with a halal logo as presented inFigure 1in the code of A2. This agent contributes 12

Table II.

Halal risk agents in the feedlot

Code Halal risk agent in the feedlot

A1 Calf suppliers do not explain its production process

A2 It is still rare the animal feed protein supplement products with a halal logo A3 It is still rare medicinal supplement livestock products with a halal logo

Table I.

Halal risk events in the feedlot

Code Halal risk event in the feedlot

E1 Difﬁcult to get information about calf process production

E2 Difﬁcult to gain protein supplement of animal feeding with the halal logo E3 Difﬁcult to gain supplement of animal drug with the halal logo

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present to probability of halal risk severity; while next agent is still rare of medicinal supplement livestock products with a halal logo.

Risk mitigation in the feedlot

Based on the HAS 23103, the research proposed mitigation strategy that might be implemented in the feedlot. The research compiled ten proposed mitigations. But, based on the correlation between the proposed HRM to the HRA, and the total effectiveness to difﬁculty ratio, the possible mitigation strategy is presented by rank of priority inFigure 2 (Figure 3).

In the light of analysis, the main priority of the mitigation strategy in the feedlot is the practitioners should try to get more calf suppliers. The second and the third priority are Figure 2.

Halal risk level in the feedlot

0%

20%

40%

60%

80%

100%

0 10 20 30 40 50 60 70

A1 A2 A3

ARPj % Kumulaf ARPj

Figure 3.

The house of risk to mitigate the halal risk agent

COR Area

Halal Risk Mitigation

Halal Risk Agents

Seeking more than one supplier of calf Tracing materials and the manufacturing process of cattle protein supplements Mlibhdb Tracing materials and the manufacturing process of cattle drug Disseminating the urgency halal policy for stakeholder companies AHRPJi

M-1 M-2 M-3 M-4

Feedlot Process

Calf suppliers do not explain its production process 9 63

It is still rare the animal feed protein supplement products with a halal logo

9 3 12

It is still rare medicinal supplement livestock products with a halal logo

9 9 3 9

Total effectiveness to difficulty ratio 567 189 81 63

Rank of Priority 1 2 3 4

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tracing materials and the manufacturing process of cattle protein supplements and cattle drug. The last priority is disseminating the urgency of halal policy for company stakeholder.

In Indonesia, many farm cattle practitioners composes the feed supplement by themselves, and of course uses the halal material; and by this process, it is not only to get a clear status of ingredient material, but also get the good quality of animal feed. About the supplement of drug medicine, many Indonesian feedlots take the prominent and famous name of company.

The famous and big company, in their perspective, will have a good responsibility.

Halal risk events and halal risk agents in the abattoir

The coming of unlawful meat, beside by the non-halal animal, it might be happen also by the unsuitable process with the Islamic teaching. That is why the main HCP should be placed in abattoir, which includes stunning, slaughter person, knife, slaughter methods, and invocation. Related to the stunning process, at least there are three probabilities of higher halal risks, which includes difﬁculty to validate the effect of stunning to the animal pain; difﬁculty to record and to store a record of stunning impact for every slaughtered cattle; and also the stunning human error that might be happen which causes the lack of halal requirement because of the less skill of stunning’s clerk.

The rest of halal risks in stunning practice and slaughter person are related to the butcher individually. By the fact, the research shows the difﬁculties to get obedient butcher religiously. Also it is not easy to meet a halal requirement that a slaughter should own a halal certiﬁcate and identity from Islamic Institution as a halal slaughterer. The butcher also should have a medical record for their healthy to prevent the slaughter human error, but it is not easy to get, as presented inTable III.

The probability of halal risk might be happen in the slaughter methods, knife, and invocation. The main halal risk in the slaughter method and knife is difficult to prove by naked eye that slaughtering has been successful to cut three channel (vascular, respiratory, and the food channel). It is also difficult to avoid a slaughtering human error that causes a non-halal meat. The other difficulty is to form a halal awareness that a butcher knife should not be lifted before it cuts three channels. Our in depth interview with official government owned abattoir indicated, a human error that might be happen in slaughtering method and knife is the wrong choice of place in the neck of slaughtered cattle which causes the butcher fails to cut three channels.

Indeed, the halal status is a yield of a human awareness. However, it was not easy to encourage the halal awareness. As presented in the Table IV, the slaughter process in abattoir still face the difﬁculty to form an halal awareness that a butcher knife should not be lifted before it cut three channels; to form an halal awareness that the slaughter must be performed quickly and precisely without lifting the knife; and to form an halal awareness that the slaughterer should not be too tired to avoid human error.

Discussing about halal risk event, the question is what agent encourages the emergence of the risk. Referring toLPPOM-MUI (2012), at least there has been twenty six halal risk agents (HRAs) encourage probably the emergence of halal risk. However, in the light of a depth as well as guided interview, and direct observation to abattoirs performed stunning practice, the research found eight agents of halal risk related to the stunning and slaughter person; and nine agents probably occur in slaughter methods, knife, and invocation. In the ﬁeld of stunning, there are probability of damage of stunning tool, the less skill of stunning clerk, the lack of manual to maintain the stunning tool, and inadequate archive facility to store the stunning record. For slaughter person, there are two HRAs related to butcher personally. The scarcity of Muslim obedient of slaughterer clerk is theﬁrst agent; the second is the butchers have not customized to record their health regularly.

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In thefield of slaughter methods, invocation and knife, the research shows nine halal risk agents. Thefirst two agents are the clerk of halal supervisor is not effective yet; and the less number of slaughterers which make them too tired. The other agents related to halal corporate culture and halal awareness building, in which halal awareness has not yet become a culture of organization; the halal training has not been done regularly; and the rest of assumptions that halal slaughtering requirements are too difficult. Finally, it is still remained the company’s stakeholders who think that the halal requirement is merely formality.

Halal risk level in the abattoir

The presentation of halal risk agents puts an enigma of each halal risk agent contribution to emerge halal risk event. The question is also which halal risk agent actually needs to mitigate? The question leads to map the HRA in the form of AHRP. Referring toPujawan and Geraldin (2009), AHRP is a result of occurrence level of halal risk agent, the severity of halal risk event, and the correlation of halal risk agent to the halal risk event. The formula is elaborated by entering the data into the Level 1 House of Risk (HOR-1). The data processing revealed twelve HRAs have accumulated 80 per cent for the coming of halal risk (Figure 4).

Table III.

Halal risk events in the abattoir (beef processing)

CODE Halal risk events in the abattoir

E1 Difficult to validate that stunning does not cause an animal death E2 Difficult to validate that stunning does not cause a broken skull E3 Difficult to validate that Stunning does not cause animal pain E4 Difficult to store a record of stunning result of each cattle

E5 Difficult to avoid a stunning human error causes a lack of halal requirement of cattle E6 Difficult to meet a halal requirement that butcher should be an Islamic religiosity obedient E7 Difficult to meet an halal requirement that a slaughter should own a halal certificate and identity

from Islamic institution

E8 Difﬁcult to meet the halal requirement that a slaughter should own regular medical record E9 Difﬁcult to prove by naked eye that slaughtering has succeed to cut three channel (vascular,

respiratory and the food channel)

E10 Difﬁcult to avoid a slaughtering human error that causes a non-halal meat

E11 Difﬁcult to form an halal awareness that a butcher knife should not be lifted before it cut three channels (vascular, respiratory and the food channel)

E12 Difﬁcult to form an halal awareness that slaughtering should start from front of the neck A13 Difﬁcult to form an halal awareness that the slaughter must be performed quickly and precisely

without lifting the knife

E14 Difﬁcult to form an halal awareness that the slaughter must be carried out before the animal conscious

E15 Difﬁcult to form a halal awareness that the distance between stunning and kniﬁng is maximum of 30 seconds

E16 Difﬁcult to form an halal awareness that saying basmalah is a halal requirement

E17 Difﬁcult to form an halal awareness that the slaughterer should not be too tired to avoid human error

E18 Difﬁcult to form a halal awareness that slaughter should not in the conditions of dizziness and angry to avoid human error

E19 Difﬁcult to prove by naked eye that slaughtering has succeed to cut three channel (vascular, respiratory and the food channel)

E20 Difﬁcult to avoid a slaughtering human error that causes a non-halal meat

E21 Difﬁcult to form an halal awareness that a butcher knife should not be lifted before it cut three channels (vascular, respiratory and the food channel)

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Table IV.

Halal risk agents in the abattoir CODE Halal risk agent in the abattoir

A1 The training of halal does not yet yield signiﬁcant results A2 The stunning instrument is not routinely calibrated A3 There is a damage of stunning tool

A4 The stunning clerk is still less skilled

A5 There is not a manual yet to maintain the stunning tool A6 The facilities of archives storage is still inadequate A7 The scarcity Moslems slaughterer clerk

A8 The butchers have not checked their health regularly A9 The clerk of halal supervisor have not been effective A10 The slaughterers are too tired

A11 The halal awareness has not become a corporate culture A12 The halal policy has not been effectively socialized A13 Halal training has not been done on a regular basis

A14 Many company stakeholder have not been interested in understanding the halal importance A15 There are many assumptions that the halal requirements of slaughtering is too difﬁcult A16 There are many company stakeholders have not felt interested in halal status

A17 There are still many company’s stakeholders who think that the halal requirement is merely a formality

A18 There are still many company stakeholder who think that the halal policy is merely to obtain market

A19 Halal policy has not been socialized in the deboning ofﬁcer

A20 Halal policy has not become a corporate culture (for ofﬁcers of deboning) A21 Halal training has not given yet a signiﬁcant result

A22 Halal training for deboning clerk has not been done on a regular basis A23 There is no halal reference for ofﬁcers of deboning

A24 Stakeholders of the company are not interested in halal policies A25 Deboning facility (to separate halal and non-halal beef) is inadequate

A26 There are many stakeholders of company who think that the halal requirements in deboning process is too complicated

Figure 4.

Halal risk level in the abattoir

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0 100 200 300 400 500 600 700 800 900 1,000

A9 A7 A4 A13 A3 A10 A5 A6 A8 A17 A15 A11 A12 A16 A18 A26 A2 A14 A1 A25 A22 A19 A20 A21 A24 A23

ARPJ % Kumulaf ARPj

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For more detail, the condition of clerk of halal supervisor that has not been effective is the major problem that contributes more than 16 per cent to the probability of the emergence of HRE. The next main problem is related to the slaughter person that is the scarcity of actual Muslim obedience to be a halal butcher. The last fact contributes about 11 per cent to severity of halal risk event. Other main agents are the less skill of stunning clerk; halal training which has not been done in a regular schedule; and the damage of stunning tool. For the last three agents, it contributes to the probability of emergence of halal risk in sequencing of 9, 63 per cent, 8, 22 per cent, and 7,012 per cent.

By the process, the research revealedﬁve halal risk agents that should be a priority to mitigate. The agents, by the sequencing from the highest to the lowest contribution to halal risk event, are as follows:

(1) The clerk of halal supervisor has not yet been effective.

(2) The scarcity of Muslims obedience as a slaughterer clerk.

(3) The stunning clerk is still less skilled.

(4) Halal training has not been done on a regular schedule.

(5) The slaughterers are too tired.

Halal risk mitigation in the abattoir

The discussionfinally comes to a fundamental question about how to mitigate the halal risk agents in abattoir. By considering the rank of AHRP_Ji, degree of difficulty to perform the action, and effectiveness to difficulty ratio, the HOR-2 process has yielded 17 proposed mitigation (M) strategies, which is ranked by the total effectiveness of the action, from M1 to M17, and categorized into three groups. Thefirst five M are the most urgent; the second of five are the more urgent; and the rest of seven are the rather urgent mitigation (Figure 5).

Theﬁrst ﬁve M consist of the following:

(1) The obligation of vendor to issue a written manual of stunning tool; and the need;

(2) of halal auditor;

(3) to certify the halal butcher;

(4) of standard number of halal butcher; and (5) of halal guideline for halal slaughter.

The second group of more urgent proposed M consist the need to/of the following:

the rearrangement of the halal training schedule;

increase the halal slaughterer;

socialization of halal policy;

training of halal slaughter; and

special training before the stunning practice.

The second group of proposed mitigation strategies is very important. However, the research places it as the second group because many abattoirs have performed it as internal of annual program and many of them have been executed. Here, the rest of the seven proposed mitigation, which include the following:

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(1) The propose to avoid the use of expired stunning tool;

(2) the obligation of the vendor to train the use and maintenance of the stunning tool;

and the need of/to:

(3) stunning ofﬁcer certiﬁcation with refer to the vendor;

(4) routine medical check-up for the halal butcher;

(5) a routine calibration of stunning tool;

(6) internal halal auditor; and

(7) facilitate a document keeper of stunning record.

For the last seven proposed M, many abattoirs feel it less important, or at least they have it done in their routine program. But, indeed, many proposed M is very important. For example, the existence of internal halal auditor is one of the halal certiﬁcation required by LPPOM-MUI (2012). Fortunately, the halal certiﬁed abattoir has had the internal halal auditor. The condition leads them to assume that the proposed M is not important. About the stunning requirement, many Indonesian abattoirs which performed the stunning practice have got the training before practice, and also has got manual book of stunning

Figure 5.

House of risk

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practices. About the routine medical check-up for halal butcher, many of abattoirs have done a close cooperation with local health center.

Halal risk events and halal risk agents in the retailing

Retailing is one of the important stages in the beef processing from feedlot to end consumer.

The basic principle of retailing is to avoid the probability of meat contamination by thefilth material which is coming from the unlawful animal or otherfilth which causes the halal meat to become non-halal, or at least, it is suspected to be non-halal just because of the unclear place from najs (filth), altered the place for pig and beef, or altered knife to cut the beef and pig. By the fact, the more important factors for the Muslim consumers are the authenticity of the meat being halal. Although it is based on UK experience (Wilson and Liu, 2010), but the tendency is the same with the Indonesian Muslim based on the assumption that the driver for halal lies in someone being Muslim (Wilson and Liu, 2010). Therefore, the process of retailing should have to be separated completely between the halal beef and unlawful meat. In this context,Riaz and Chaudry (2004)placed the retailing as one of the HCP which assumed the unlawful meat could probably happen in the process of retailing.

Referring toLPPOM-MUI (2012), the research collected at least seven halal risk events that probably happen in retailing process and transporting. The identiﬁcation of halal risk event is also based on the result of in-depth interview, direct observation and FGD. The sources of information are transporter, supermarket manager, and also the traditional market which provides the meat for consumer. The observation is focused in Indonesia because the retailers of Australian beef are mainly in Indonesia. But to complete the data of retailer, the research also collected data from the Australian retailer in Brisbane and Melbourne. The object of the observation in Australia included the big supermarket and the middle market.

The instrument to collect the probability of halal risk event is using the word“difﬁculty”

in the form of Likert scale. But, for many supermarkets and traditional markets, in the Indonesian context, they actually do not get a significant difficulty to handle the action contained in the questioners. The degree of difficulties commonly varies between neutral and easy, which indicated that there are not the significant difficulties. In consequence, the risk of halal in retailing process is not significant. For the Australian context, they differentiate completely between the halal and non-halal butcher. For the halal butcher, the meat packaging in the outlet and the place are entirely separated from the non-halal meat (Table V).

About the degree of difficulties, if the retailer and transporter actually get difficulty, it means the company got a high risk of halal. But, fortunately, there are not significant difficulties faced by the retailing practitioners. For the common condition, they do not get

Table V.

Halal risk events in the retailing

Code The Halal risk event in the retailing

E37 Difﬁcult to provide the special container to deliver the halal meat

E38 Difficult to provide the special carriage to avoid meat contamination of filth E39 Difficult to provide special warehouse in the port for halal meat before shipping

E40 Difﬁcult to form halal awareness for management and employees related to the transportation and storage

E41 Difficult to provide special warehouse in supermarket for halal meat E42 Difficult to separate halal meat outlet in supermarket with the pig outlet E43 Difficult to form a halal culture for supermarket management and employee E44 Difficult to gain a halal certificate for meat product

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difﬁculty to provide the special container to deliver the halal meat. They also do not get difﬁculties to provide a special warehouse and special outlet. But, to form the halal awareness perfectly, the supermarket and the traditional market get problem. Although their practice to handle the meat apparently complies with halal requirements, it still arouses a critical question whether their practice is based on the halal consciousness or only based on the common practice of company. Indeed, the halal matter is yielded of awareness.

Without halal consciousness, it gets high risk to fall into risk of halal. In the light of the facts, it needs to form a halal consciousness completely.

The halal risk agent as a result of research browsing by the literature study with reference toLPPOM-MUI (2012), as well as direct observation, and in-depth interview with the practitioner of market is presented inTable VI. There are nine HRA that have a high probability to arouse the risk of halal. For more details, the agents of halal risk are related to the absence of halal policy, halal interest, halal knowledge, halal training, halal guideline and halal facilities. But, which of the halal risk agent contributes mainly to the halal risk? The halal risk level as a result of HOR-1 analysis, in which it considers the occurrence level of the agent and the correlation of the halal risk agent to the halal risk event.

Halal risk level in the retailing

The halal risk level is very important to reach aﬁnal goal of the research, to control the agent of halal risk. By controlling the agent of the risk, it will come to guarantee the status of halal meat. In this case, the research did not control the event of halal risk, but proposes to mitigate the potential agent of halal risk. By controlling the agent, it will avoid a risk completely.

The HOR model analysis indicated the limited place to separate the halal meat and unlawful meat is the main problem of to arouse the halal risk. It contributes about 20 per cent to the emergence of halal risk. The next agent is the absence of halal guideline which contributes about 18 per cent to the emergence of halal risk. The next agent in sequence is the lack of halal interest of the management, assumption that the halal requirement is too complicated, assumption that halal certiﬁcate is not important, and the thought that it is not important to separate the halal and the unlawful meat. The six agents accumulated more than 80 per cent of the probability of the emergence of halal risk. Additionally, of course, the six agents become the priority to mitigate. For more details on the six agents of halal risk contribution to the emergence of halal risk event is presented in Pareto Diagram inFigure 6.

Finally, by this fact of the agent of halal risk, the question is how to mitigate the agent of halal risk.

Table VI.

Halal risk agents in the retailing Code Halal risk agent in the retailing

A47 There has not been a halal policy for the company

A48 The management and employees assume no interest for the policy A49 Halal requirements are too complicated for the company

A50 There have not been written halal guidelines for all stakeholders of the company A51 There has been no halal training for management and employees

A52 Warehouse facilities are still limited A53 Place of the meat product outlet is still limited

A54 Many consumers consider it does not need to separate halal and non-halal meat product A55 The stakeholders of company still consider unnecessary of halal certiﬁcation

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Halal risk mitigation in the retailing

Which of the agent risk mitigation should be a priority? The HOR-2 presented the rank of priority by considering the AHRP, the correlation of halal risk mitigation to the halal risk agent, total effectiveness the action, degree of difficulty to perform the action, effectiveness to difficulty ratio. By such consideration, the HOR-2 came to rank of priority to mitigate the halal risk agent. The halal policy and providing the facility to prevent the halal status took the appearance of the bigfive priorities (Figure 7). For more details, thefirst priority is the need of a halal policy for transporter’s companies and supermarkets. The second is the need of halal policies to fulfill the growing of halal demand. The third is the need to make a halal policy as a distinction of transporter companies and supermarkets. The fourth is the need of halal policies and halal facility as an investment to attract a larger market; and thefifth is the need to complete the warehouse and outlet facilities to meet the needs of halal criteria.

Conclusion

In the light of description, explanation and argument based on the literature review, in-depth interview, guided interview, direct observation, as well as data processing using the described methods;ﬁnally, the paper comes to a conclusion, as following:

The priority of mitigation strategy in the feedlot to get a halal and thoyyib meat is the feedlot practitioners should try to get more calf suppliers; tracing materials and manufacturing process of cattle protein supplements and cattle drug; and disseminating the urgency of halal policy for company stakeholder.

The main mitigation strategies to guarantee the halal meat status in the abattoir is the obligation of vendor or the factory to issue a written manual of stunning tool; the need of halal auditor; the important of halal butcher certiﬁcation; the urgency to standardize the number of halal butcher; and the need of halal guideline for the halal butcher.

The priority of halal risk mitigation for the retailing to avoid the meat contamination is the need of a halal policy for transporter’s companies and supermarkets; the need of halal policies to fulﬁll the growing of halal demand; the need of halal policies and halal facility as an investment to attract a larger market;

andﬁnally the need to complete the warehouse and outlet facilities to meet the needs of halal criteria.

Figure 6.

Halal risk level in the retailing

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Corresponding author

Ferry Jie can be contacted at:f.jie@ecu.edu.au

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